What a difference
a year makes! In August 1999, Congress passed emergency legislation to
provide domestic oil and gas companies with guaranteed loans so that they
could “get back on their feet” after low oil prices had crippled the industry,
particularly small producers. The bill itself was a small gesture and in
order to be considered it had to be appended to another bill providing
similar relief to the domestic steel industry. When gasoline prices are
low, few lawmakers feel a need to talk about energy policy.

Fast forward to the summer of 2000. Oil prices
that had bottomed out at $11 per barrel in March 1999 soared in the first
months of the new year, reaching $34 per barrel by March. Gasoline prices
had doubled. A half dozen committees in both the House and Senate were
holding hearings. Senate Majority Leader Trent Lott (R-Miss.) was spearheading
an effort to pass his National Energy Security Act of 2000 (S. 2557).

Billed as a comprehensive energy strategy for
the nation, Lott’s legislation proposed a series of measures to decrease
U.S. dependency on foreign oil to below 50 percent in the next decade.
His more immediate goal was to capitalize on a potent election-year issue
and draw attention to the Clinton administration’s lack of an energy plan.
Energy policy is now seen as a worthy topic for discussion, but the campaign
season has shed more heat than light.

Energy: a campaign
issue

Out on the stump, any politician caught without
an energy strategy — tailored, of course, to the particular needs and wants
of their constituents — might as well start polishing their concession
speech. In June, Vice President Al Gore unveiled his 10-year, $125 billion
energy plan. Texas Governor George W. Bush unveiled his 23-point “Comprehensive
Energy Policy” at a campaign stop in Saginaw, Mich., in September.

Both Bush and Gore call for greater assistance
to low-income families. Both call for greater funding of research and implementation
of alternative energy sources. But, somewhat ironically, it is where the
plans are most similar that perhaps their greatest difference appears.
Bush would pay for these special programs with the leasing bids derived
from opening 8 percent of the Arctic National Wildlife Refuge (ANWR) on
Alaska’s North Slope to petroleum exploration.

Opening ANWR has long been a priority of the Alaska
congressional delegation and the petroleum industry. Supporters argue that
modern drilling techniques would minimize the footprint of operations,
and they point to the need to maintain flow in the Trans-Alaska Pipeline
System as Prudhoe Bay deposits are exhausted.

Gore has sided with environmentalists who are
implacably opposed to petroleum exploration in the ecologically sensitive
coastal plain of ANWR. In an earlier effort to deflect the pressure to
open ANWR, the Clinton administration allowed drilling in 4 million acres
of the National Petroleum Reserve-Alaska, located at the opposite end of
the North Slope from ANWR.

Attention shifts
to winter fuels

If ANWR seems to be an intractable problem, more
common ground appears when the issue shifts to additional development of
natural gas resources. Both sides in the debate have embraced natural gas
as a cleaner-burning, more environmentally friendly energy source to replace
petroleum and coal.

Both candidates’ energy plans call for incentives
to encourage natural gas exploration. Bush has gone a step further, indicating
that he would consider approving development of offshore leases that pre-date
the current moratorium on drilling along most of the U.S. outer continental
shelf.

The allure of natural gas stems from its domestic
abundance and cheap price, making it a viable alternative to coal-fired
power plants. But cutbacks in both domestic production and exploration
brought on by the low prices of 1998 and 1999 have lowered reserves, and
the tight supply has meant natural gas prices have doubled since 1999.

And so it came to pass that even as gasoline prices
stabilized in late summer, politicians found themselves confronted with
the prospect of rising prices for natural gas as the winter heating season
(and the election) approached. Compounding the problem, the cost of heating
oil tripled between February 1999 and August 2000. To ameliorate a possible
heating oil crisis, both Democrats and Republicans have called for creating
a reserve in the Northeast, where heating oil is a major sourceof residential
heat and where reserves are down 60 percent from the previous year. In
July, President Clinton told the Energy Department to establish such a
reserve as soon as possible.

Far more controversial was the president’s decision
in late September to release 30 million barrels of oil from the Strategic
Petroleum Reserve. Republicans, led by House Majority Whip Tom DeLay (R-Texas),
were quick to criticize the president’s decision as election-driven, arguing
that refineries are already near capacity and that the additional oil will
not increase the amount of heating oil available this winter or decrease
the price.

A genuine dialogue?

It seems safe to say that the election season
has proven ill-suited for any substantive discussion of energy policy,
long-term or otherwise. Rhetoric and posturing are bound to reach a fever
pitch as Election Day nears. Moreover, many of the measures being proposed
are not likely to have a major impact on real prices. Demand for heating
oil varies by 25 percent or more depending on winter temperatures, and
the severity with which Jack Frost visits New England will have a much
greater effect than any program emanating from Washington.

But if high prices continue into January, the
new Congress is bound to take up energy policy. And so will the transition
team for the next administration. The federal role is limited, but a number
of issues are still worth tackling in Congress from a less partisan approach.
From a geoscience perspective, an important question to address is how
policy-makers can put information and analysis from the U.S. Geological
Survey and the Department of Energy to the best use. Broader questions
are: What will be the real costs of shifting away from the current energy
supply mix? What are the environmental and security tradeoffs between domestic
and international petroleum production? How will the debate over climate
change affect energy policy? Has the economy become more resilient to oil-price
shocks, as many analysts claim? What incentives and research initiatives
will make a real difference in the viability of alternative energy sources?

At best, congressional and presidential actions
will only nudge the overall direction of private-sector activity and consumer
consumption. But sometimes a nudge is all it takes.

Applegate is director
of the American Geological Institute’s Government Affairs Program and is
editor of Geotimes. E-mail: applegate@agiweb.orgStatistics in this
column are derived from Energy Information Administration data (www.eia.doe.gov).
For more specifics on energy policy proposals, see the AGI legislative
updates at www.agiweb.org/gap.